Lack of markets for bauxite a cause of worry for Mozambique govt

The Tax Authority of Mozambique has confirmed that it is holding negotiations with Vale Mozambique, the local subsidiary of major Brazilian mining group Vale, on the payment of capital gains tax. Vale Mozambique is one of a number of major companies with which the tax authority is currently having such talks. Vale Mozambique owns 95 per cent of the Moatize coal mine and 70 per cent of the Nacala Logistics Corridor.

Tax Authority chairperson Amélia Nakhare told the O País newspaper that her agency did not regard these deals as completed yet, although the intention to sell was public knowledge, and therefore she could not specify the amount of tax to be levied. She did say, however, that “it would be significant”.

Meanwhile, the provincial government has voiced its concern about the lack of markets for bauxite being mined in Manica. Production of this mineral rose by 47 per cent from 2014 to 2015, from 3,386 t to 4,985 t. But much of this remains unsold.

Previously, most of Manica’s bauxite was exported to Zambia, noted Provincial Economy and Finance director Virgulino Nhate. “We have a lot of bauxite in the province,” he said.

“Zambia used to buy much of this product. But, in recent years, it has been buying in very small quantities, and this is compromising our production. We are working to see it we can open other fronts to place our product on the market.”

Although Mozambique hosts a major aluminium smelter, Mozal, outside the capital city of Maputo, this uses alumina (refined from bauxite) as its feedstock, not unprocessed bauxite. This alumina is imported from Australia.